Collateral settlements using blockchain: JPMorgan


As blockchain usage in finance increases, JPMorgan is preparing to offer related services. A blockchain-based collateral settlement has been implemented recently.
In the pilot transaction, two of JPMorgan's
entities transferred a tokenized representation of Black Rock Inc. money market
fund shares on May 20.
The bank said it plans to offer investors a wide
range of collateral for its private blockchain.
Ben Challice, global head of JPMorgan's trading
services, said BlackRock didn't participate as a counterparty, but it has been
heavily involved.
He said, “What we’ve achieved is the friction-less
transfer of collateral assets on an instantaneous basis.”
Adding, “since day one and are exploring the use of
this technology.”
Since the establishment of Onyx Digital Assets
(ODA) late in 2020, JPMorgan has been actively involved with crypto and blockchain. The project is known as a "blockchain-based network that
enables the processing, recording, and delivery-versus-payment (DVP) exchange of
digital assets across asset classes," it is described as a network for
transacting across asset classes.
In the short run, tokenized collaterals will soon
be offered for equities, fixed income, and other types of trades as well. Right
now, tokenized collaterals are used for derivatives, securities, and repo
trading.
The firm's goal is to not only provide the needed
support needed by blockchain users but also to provide all the related services
needed.
In recent months, JPMorgan has become very bullish
about cryptos and blockchains. The firm recently issued a $38k price target on
Bitcoin, while expecting it to reach $150k in the long term.

Pavan A
CBW - External Analyst
INDIA